How Do You Get Comfortable Investing Your Savings?

Meet Dave – our new friend who asked for some help in this area, and to whom I shot some thoughts over. Putting this out there for anyone else it may help too!

Here’s what Dave sent in:

I am new to your podcast and hear you guys talking about net worth and where your money is. I am currently sitting on savings and haven’t put my money somewhere. I hesitate moving money with the idea that I might get fired or need the money to pay for emergency situations. How would you approach that? I know I am doing this wrong and should be investing it. There is just something comforting about having money in the bank.

Who cares if you don’t earn much off of it. If it makes you comfortable or happy or both, keep doing it.

#2) That being said, yes – financially it’s much smarter to invest it somewhere to help that cash make more cash babies and their cash babies make babies and so on and so on.

I personally go the index fund route with a look for the way future (decades ahead), but others like to put it into CDs or individual stocks or even real estate. Pros and cons to all of it, in terms of risk and reward, but there are options out there and I guarantee you can find one you’d be comfortable with once you spend some time researching.

#3) The biggest question is how much $$$ we’re talking, and how much you need for feeling safe. (As well as how much you spend as that can be the matter of having 1 month of security or 1 year of security)

For me, anytime I get a big chunk of money I look to see if I have any debts and then pay that off right away (c/c debt, loans – maybe mortgage depending on how much we’re talking and your strategy), and then I move to my emergency/comfortable fund and see if that’s topped off (if it is, I move on – if not, I fill ‘er back up), and after that go to maxing out all my retirement funds (401(k), IRA, etc).

Then – if you have more after all that (would be a blessing!) – I move to extra investing which is where most people turn to the stock market or real estate or whatever else they like (gold/silver….). I’d also make sure $$$ for my kids are set up too, like for 529 college savings accounts.

Again though, it depends on how much we’re talking and what your overall goals are. If you’re trying to retire early it’s probably going to be different than if you wanted to go out and start your own company one day. But either way you go, if you want your $$ to grow exponentially without much work on your behalf, you’ll def. need to put it into something at some point.

Start small and get a feel for it – you don’t have to rush into anything. Make sure you have a decent chunk saved up to feel comfortable/safe, and then take it slowly from there…

Check out some ways to micro-invest, like financial app Acorns which will automatically round up your transactions and drop the difference into an investment portfolio for you a few pennies at a time. I’ve been using them for a year and have $495.25 banked so far and haven’t missed a single dollar. Ultimately you’d want to be investing way more than that, but this would help get your feet wet and you can also up the settings to invest even more each month as time goes on if you’d like.

ALSO — MAKE SURE YOU’RE GETTING YOUR 401(k) MATCH IF YOU HAVE THE OPTION!!!

That’s FREE money and it’s all automated helping you invest without even thinking about it. Not to mention saving on some good taxes up front too. Load it up and take a break from saving for a while! Even without matching it can be an easy way to invest more. HR can help with this, as well as *what funds* to invest in based on your comfort levels/goals. There’s even super conservative options in there like cash too, though I’d recommend the other options since you’re already cash heavy.

At any rate, there are tons of ways to get started growing your money – just take your time and you’ll be fine :) And again, it’s not the end of the world hoarding some cash!

Hope this helps.

*****

I didn’t put it in there, but the good thing is that if you’ve managed to save a good chunk of money, you’ve already done the hardest part :)

Another nice thing about holding onto cash is that it gives you tons of OPTIONS! Not only for growing your wealth, but from staying out of future trouble too. This is why I don’t have a problem with people stacking up all their cash for a while. It’s not optimal in a return-sense (yet), but wow does it put you in a good position for future opportunities.

Nice! Sounds like Dave is already on the right track. Most Americans only save about 5% of their income. Clearly, he’s better off than most. I like how you’ve pointed out you really can’t go wrong with cash. If an investment makes you lose sleep, something is wrong. Personal risk tolerance is huge when it comes to making these decisions. Ideally, Dave’s cash is earning enough interest to fight inflation, though.

That’s solid advice and sounds like Dave is in better shape than most with some cash in the bank. Like you said, you can never go wrong with having cash, at least until you figure out what your goals are and what big expenses you might have coming up and funding a reasonable emergency fund of course!

I agree with what you said. You need to find that point for your cash reserve where you feel safe. Whether it is $5knor $25k. It isn’t going to be worth investing more than makes you comfortable if you are just going to be fighting anxiety from not having enough “safe” money.

“…but wow does [cash] put you in a good position for future opportunities.”

Here here. I’ve lost count of how often having access to cash makes it possible to take advantage of opportunities that come along and I too struggle with investing much of it from time to time. The flexibility it offers in trying new things and saying “yes” to more of what you know will move you in the direction you want to go is AWESOME! It also helps you listen to your gut more, something we start to ignore when we have little security. Thanks for sharing your response to Dave.

Very true about your gut! Whenever you *need* money or stability or whatever it tends to skew your actions. When you’re on solid ground you’re more likely to go w/ what you think is best 100%! Less risk!

That’s great you’ve been saving well and ready to take the next step to build your net worth. I’d recommend outlining your goals, prioritizing them and putting money to work specific for each one.

For me, retirement is 5+ years away so those assets are entirely in stock mutual funds in my 401k and IRA. My kid is only 2 so his 529 is also in all stock mutual funds. And I don’t hold much cash in the bank for liquidity because I have back up sources I can tap if needed.

In summary, my long term goals are satisfied by stocks which do well over the long term and my minimal short term needs are satisfied by a little cash in the bank. Hope that helps!

I remember being in this same situation about 4 years ago. I was in college with a year old baby and had about $65,000 in cash sitting in bank accounts, because we didn’t know how to get it started in the market. Thankfully I took a personal finance class my last semester and learned some more about the subject. It was life changing to learn about Vanguard and how much to hold in emergency funds and all of that. We ended up deciding that we wanted to leave $50,000 in our high yield online account to use as a down payment for a house when I graduated and figured out where we were going to settle down. Then we decided that, given our current spending situations that $5,000 was enough to have in a shot term emergency fund (especially since we would still have access to the $50k until I had a stable job started). and that left us with $10,000 to start investing with.

Based on my professors suggestion we started with that $10,000 in low cost Vanguard index funds and over the last 4 years we have slowly added to it until it is now at about $48,000. Starting this way was also great experience for when we would have a 401(k) option. As soon as it became available I was confident enough to start using it right away and pick my own funds to match my risk tolerance and long term goals. It’s nice to see that over the past 3 years that has gone from $0 to $35,000 without ever feeling the pain of not having touched the money.

Looking back now it was hard to make the jump from saving to investing but once I did it I realized that it wasn’t nearly as scary or bad as I had expected it to be. My biggest regret about it is that I didn’t start investing sooner by fully funding some IRAs for us while we were still in college and living in the 0% tax bracket – then we could have invested at 0% and withdrawn it at 0% as well. Live and learn, now I’ll be able to suggest it to my kids when their in college.

Wow – great answer. Smart people always invest. You were indeed more lucky than you realize to have had a professor who presented a class that cemented the foundation for your financial life – Kudos on seeing it through.

Oh that 401K match and not using it! I never had that option until I started working at a private college. One of my colleagues said he couldn’t afford to do the match (which was 6%) and I had to sit and explain what that really meant and how much he was giving up. It’s interesting how some really smart people don’t get money at all (remember this is someone with a doctorate…)

Great advice here. It’s awesome when having money becomes the issue over not having money. :) Good on you, Dave!

I have always been a fan of saving my cash. The standard 6-8 month emergency fund has never been enough to make me feel secure so I always sat on a bit extra. What helped me to wake up and start investing was doing the math. I make this much a year -> I save this much a year x this many years to retirement = oh shit. I NEEDED to invest in order for my money to grow to what I want it to be. The benefits of compound interest will blow your mind!

Good luck to you, Dave. The first deposit is the hardest to part with but as soon as you see it compounding you’ll be thrilled with the results! Remember – you can always take it out if you need to.

The high-five is my favorite. We absolutely have a bit more cash than we’d like. Until we get our 403b ducks in a row, though, it’s into our savings and our taxable accounts (of course, our Roths are maxed out). Thanks for the reminder that saving isn’t the worst thing in the world!

The quote from Mark Cuban, “You aren’t saving for retirement. You are saving for the moment you need cash…. Cash is king for those wanting to get rich.” is so true for me right now. I have saved a good chunk of cash and had it sitting in a savings account with an on-line bank (Ally). It wasn’t for retirement… just a rainy day. I called it my GTH (Go to Hell) fund in case I ever needed to just quit work. Well, my rainy day came. Lots of rain. (I live in the area hit by the Great Flood of 2016 in Louisiana.) Now, it looks like I will need that money to repair my house. The only thing that sucks about having that rainy day fund, I think it makes me ineligible for a lot of the Federal assistance floating around. :-P

Thank you for answering this question, J! My husband is so guilty of this: ever since he had to start a savings account to build up the first $3,000 to start a Vanguard IRA (several years ago now), I haven’t been able to get him to put money directly into the IRA. He always puts it into the old savings account first, and then tries to wait until the LAST MINUTE in April of the next year to actually put the money in the IRA!

It hasn’t mattered how many graphs I show him about how holding all your money and making one deposit a year will give you lower yields than investing right away. It doesn’t seem to matter how much I try to lead by example and put money into my IRA right away. It also doesn’t seem to matter that we both have separate but cushy Emergency Fund savings accounts that we can draw from. And of course, nagging doesn’t do anything ;)

In the end, he IS more comfortable with lots of cash, because years ago (before we met) a medical emergency wiped out the thousands of dollars he had in cash – everything he had – and he does have lingering fears that he will need large amounts of cash very suddenly again.

So you know what has worked with him? Using an HSA as a retirement account and maxing that out before our IRAs. It took some convincing, but because of his history with losing cash to a medical emergency, he’s much more amenable to putting the money into an account that would be accessible in that case. A cushy HSA account is a great middle ground for us – it satisfies his need for emergency medical cash, and my need for retirement savings. At least… up until we hit the 2016 Family Contribution limit – then it will be back to trying to convince him to actually deposit his cash into that IRA again!

GREAT IDEA Steph!! Love that! And totally makes sense about why he’s so hesitant too. I used to worry about the timing of *when* to drop in money and all that too, but now after seeing the same graphs and articles you have I’m sure, I’m def. convinced it’s good to just put it in there and let it start getting to work :) Buy your man a beer for me for taking on some baby steps.

Haha thanks! Not only does it make numbers sense to invest it sooner, but if you park it in a savings account meaning to invest it later, you might forget and miss the April 15th tax deadline or something like that! Better to save yourself the trouble of remembering, I say. :D

And the husband thanks you for the pumpkin ale I bought him at the grocery store tonight, hahahaha!

Also he could use some of it to advance himself by gaining a certification or taking a course relevant to his field, start a business, etc…People generally never talk about it but while VTSAX will get you ~7% compounded annually, investing in your skill set has no upper return limit, the returns could be 400000% or greater.

You are right, It is difficult to measure and highly variable bases on the individual and their situation.

I do think we are all here because we are passionate about not working till we are dead, and one way to accomplish that is to make more money. I only say that because I have started to lean a different direction on passion. I used to think it was all about finding something to do that you love, or at least don’t hate. but now I really think its about getting in and making as much money as possible in the shortest amount of time possible. I’m not sure I could be really happy with any job until I am FI. Once I have the option to work or not work I think at that point it would be hard not to be happy with your work arrangement.

Guess it depends on how long we’re talking too. If you can pull off FI in 10 or 15 years and then have 50+ to live life fully, could def. be worth it. If it’ll take you 20-30+ years to hit it, I’d probably pick the more passionate – daily happiness – route than suffering through for so long. Provided we even live that long! I think we all go in phases with stuff and see how life changes along with it. I have a new life epiphany every 5 years it seems :)

It really is true about learning the ways of this world as you age. I used to brush off old people when they gave me advice. Now I realize how foolish I was. They’ve already been through all of the BS we’ve been through and then some. Naturally as I get older find myself prescribing to the ideas of my grandparents and great grandparents. I had that epiphany a few years ago, you know the one where you realize old people really know this world and all of its tricks.

That and as I’ve aged into my mid 30s I find myself shocked by how foolish most 20 somethings sound when they talk about any subject. I think to myself ” I really hope I didn’t sound like that 15 years ago…” I never really feel like I’m in my mid 30s till I am around a bunch of 20 somethings, then I just want to bang my head on a wall.

YES!!! Was just having this conversation with a 75 y/o at Starbucks the other day! And how everyone brushes him aside – especially with career-related stuff – even though his brain is full of stuff that takes us decades to learn. He was telling me how much he laughed at a recent grad that had started working at his company before he retired and how he was calling himself a “specialist” at the job because he got a degree in it :) My new friend was like, “You come back to me in 30 years and then I’ll give you the specialist certification” haha…

I’m with you, Dave. I need a cash ‘blue blanky’ to feel secure, above and beyond our actual emergency fund. But investing is easy, even if it feels intimidating at first.

1. Emergency fund of at least $1k

2. 401k matching. Get everything your company will give you, it’s free money!
2a. Look hard at the funds your company gives you. Many companies sneakily have super high fees that essentially make people pay for their own match. (Bogleheads book/website will explain better.) I like the Vanguard Spartan index funds – index funds give comparable returns as funds with a manager(s) actively picking stocks, but without paying the salaries of managers. Spartan funds are super low fee.*

3. Pay off debt.

4. Cash savings fund of your comfort. (You can alternate debt and savings if you prefer) Some like 6 months of living expenses, some like a set amount. Figure out what lets you sleep at night. Schwab advised me to have $20k, but I live in expensive cities.

5. Invest. I like low-cost index funds, as I mentioned.
5a. As a youngish person, my policy is that when the stock market tanks and everyone panics, awesome – time to buy bargain stocks! It’ll go back up, and you’ll make money from it. (Do NOT get sucked into money shows or panicky articles, those are not rich people, or they are rich people making money off of making people panic.)
5b. Expect a 6% return over your lifetime, compounded – people say the average return is 10%, but that includes the 1920s, 1950s, and 1980s, I’m skeptical that it will average out that high again.
5c. I have really liked Schwab. They have given me a good bit of free, good advice, and when I asked for justification of specific recommendations (when I knew something about that area), I liked their reasoning. I also like the quality and knowledge of their customer service, and that they seem to care about long term retention (rather than BOA-like short term gouges). YMMV.

*For 401k, you want your fees to be at/under 0.20% expense ratio (0.20% is also called “20 basis points” – but I have to look that up every time). The outrageous fees get near or even over 1%. They have to tell you the total management fees/operating costs, but sometimes you have to look a bit – but do look, it’s super important! In my company’s options for our 401k, they only had one low fee option (Spartan 500 Index), with fees of under 10 basis points (0.095%) The rest are 8x to 11x times that cost (82 – 110 basis points, or 0.820% – 1.110%)!!!! Eek! What?! (splutter in indignation)

I’m glad you mentioned Acorns, as this would be a painless way for Dave to get used to automated investments. Probably the most successful step for Dave will be to set-up automatic withdrawals every two weeks so he can’t try to back out.

You really can’t go wrong with an S&P fund. My retirement savings are buzzing after I got rid of my terrible 401K, which had no index funds, and put it into an IRA, mostly in the S&P. Obviously if the market tanks, the S&P tanks, but it has definitely been the steadiest and best performing investment in my portfolio. Is it worth it to get involved with something like Acorns if you are automatically saving every month anyway?

Lots of unknowns about Dave’s situation to answer in detail, but your advice is good, J. I assume he doesn’t want to lose his money if he puts it into the stock market and that’s why he can save, but not invest. Two things about that, (1) A market dip does not equal an actual loss. You only lose if you sell for less than you bought. And (2) some are worried about getting money back out and paying penalties; you can always take out your invested dollars penalty and tax free from an after tax IRA…only gains are taxed.

Try to get *something* from that cash! A dollar tomorrow is worth less than a dollar tomorrow, so put that money to work somewhere that will earn interest and offset the negative effects of inflation.

$30 to $50K is what makes me feel a little safer and a little better prepared for both life’s emergencies and life’s opportunities – beyond that, hell yes, bring on a world of investment opportunities.

Common sense will tell you that at some point you will need to diversify – consider investing in yourself – real estate – stocks/bonds/index funds – start your own business – fund someone else’s start up…
There is no point and worse, there are no gains to be had from sitting on your cash – presently all cash sitting in the bank is a losing proposition due to the interest rates.

I agree, the first step is the hardest:) Start with Vanguard Index funds, set it on automatic and send them X amt every month. Don’t hover, don’t look – it is all good and in twenty years you will thank your scared little self!
It is all about steadfastness – in todays language – rinse and repeat.

Never commit the mortal sin of not taking advantage of your 401K employers contribution – since when can you afford to throw away free money? In fact, smart money maxes out their annual contribution.

Do make an effort to read up and stay informed yourself. Nobody cares about your money as much as you do. Investing in index funds is a no brainer – they have the lowest fees and it is all done on line.
Better yet, if you need access to your money you can liquidate within about seven days. You can deal with that, can’t you, Dave?

Stash is another one of the new Micro Investing opportunities that are fun to explore and play around with, if you want to start on a really small scale. It is a good way to learn when you don’t have the big bux for investing.
I also like Motiv Investing, but my primary monies all go to Vanguard Index Funds.

I do think that Mark Cuban’s comment should be taken with a grain of salt. It is not likely that he is sitting on a pile of cash earning 1% with Ally bank online and clearly he does plenty of investing…..

I actually agree with Mark Cuban.
I live in the Bay Area, where housing is WAY too expensive. Wife and I are currently trying to grow our regular cash savings to not only have it as a safety net, but also to use it once the next housing bubble bursts(I predict it happening in 2-3 years). The cash will allow us to have a down payment for a nice, and hopefully more affordable, property.

We also have some invested, but we think that if there’s a housing bubble burst, the amount in regular savings wont be affected as much as what’s invested.

I do love Cuban’s tips overall, with the only exception of him hating on the stock market – saying it’s all a scam. There’s def. shady parts to it, but boy – it can work some miracles! And not everyone is comfortable investing directly into businesses or startups as he is.

I can totally relate with the, I know I should invest some of my cash holdings, but it looks so pretty there, attitude. We’re probably too cash heavy at the moment, but that’s my comfort zone. There are times when I feel we need to part with some it it and get it invested. I take advantage of those moments and do it right then before I change my mind. My comfort spot is about a 6 month emergency bucket +/- a little (usually more +). It’s come in handy as I have parted way with my last company. Just like everyone else, I never thought I would be without work for the 4+ months it’s been so far, but it happens and I’m glad we were prepared.

We’ve been able to keep pace with the basics to maximize our investments after having our cash comfort zone established:
1. Roth contributions
2. 401k up to employer match
3. Increasing 401k up to yearly max $
4. Anything left either to cash or to brokerage accounts

I have the lowest emergency fund I’ve ever had. I went from $100k to $50k (which I described as “almost out of money”) down to $30k now.

The thing is, that’s about a year of normal expenses, but when I had to change out my air conditioner, it was about $10k (it included a lot of work, not just changing out the unit). So, $30k won’t go very far if the air conditioner goes out and the roof starts leaking at the same time.

Oh no. Sorry if I wasn’t clear. I didn’t spend it. I put it my Wealthfront account. I was just saying that I have a lot less cash on hand if emergencies arise. It’s great that it’s earning interest, but it does increase my risk of running out of cash in an emergency.

I found it helpful to save up a definite amount for an emergency fund. If Dave is single or the sole bread winner, it would be safe to go with 6 months of expenses (not salary) to see him through a possible job layoff. That would give him time and money to set a course of action, find another job, sell the house . . . whatever he chooses. After saving up that dollar amount, I would advise splitting savings (for future big purchases – like a car or a new furnace) and long-term investments for retirement 50/50. Once his foreseeable savings needs are met, he can make it more like a 20/80 split, with more and more going to long-term investments – whether for traditional or early retirement. Good luck, Dave! The fact that you’re saving and not debt-ridden is a very, very good start!

J. Money thanks for sharing Dave’s dilemma with us. I like that in addition to the solid answers you gave him you were also encouraging by helping him to feel good about his current situation.

I appreciate a lot of the comments, especially from superbien; I’m working on paying off debt while saving/investing. I also like The Green Swan’s suggestion about writing out his goals, which is critical in helping us figure out where we want to go.

Most people in this country definitely have an investing problem. In that they just don’t do it! So many co-workers of mine fail to take advantage of their 401k for no reason at all really. Glad to see Dave realizes there is a problem and great advice J!

It can certianly be intimidating to put your savings into investments. I still hold onto a large chunk of cash, a bit too much but I can never really decide what to do with it. I know I’ll spend a big portion of it someday on a house downpayment, but that could be a year or so away(and has been “a year or so away” for a few years now). I’m also looking for new investments for some of it. Not sure if i should max out my rrsp or try some private equity with a bit more risk for more reward. There’s just so many options it’s hard to pick.

Cash is entirely undervalued, in my opinion. It gives you crazy options for investing. Instead of investing in index funds or the stock market, I would recommend investing your time in learning how to spot opportunities. Retirement savings is great, and maybe you can start putting away some small amount each month going forward, but big opportunities come from having tons of cash.

I’m hoarding cash right now because the stock market seems a bit too high for me.
I still regular contribute to 401k and Roth IRA, but the rest I’m keeping in cash for now.
To make investing easier, Dave should make it a routine. Invest a bit every month and keep increasing. It’s harder to invest a lump sum, but you can’t go wrong with dollar cost averaging over a long period of time.

I had this same problem for a long time, I wanted to keep my money safe and guaranteed. Then I played around with some calculators and saw that even with 2% gains (which is almost impossible to find in CDs/ savings accounts with rates so low) I would never be able to retire early and in most cases I would either lose to inflation or essentially just end up with the same amount of money! If I was making millions of dollars a year, this wouldn’t be a problem – but unfortunately I am not.

I decided that I would have to invest in the stock market if I really wanted my money to grow, and if I do end up losing it all – there’s probably much bigger problems to worry about on a global or national scale. Having a bunch of money hoarded in a savings account or under my mattress probably wouldn’t do any good in that situation either.

I know, it’s a sad realization but still very true :( You gotta find stuff to get at least a 6-7% return if you want any chance of retiring early – or hell, even on time. Unless again you’re making bank or get lucky with an opportunity/business/lottery, etc. You can’t get rich off cash, but you can certainly use cash to get rich!

All good stuff here. I just have a slight pet peeve about how people talk about the “emergency fund.” (The term my husband and I use is “cushion” because it cushions the bumps and ups and downs in life.) I know you were trying to be brief with him, but sometimes people don’t know how much cash will make them comfortable. A couple of simple guidelines (or think lines) can help.

The usual guideline was six months take home pay to give you six months income if you lose your job. Of course, in the last recession it took many people more than six months to find a new job, so it’s really your best guess how long it would take you to find a new job. Make that guess and save accordingly.

If you are closer to retirement (and have funds to support that) or if you don’t have good health insurance or have a serious health problem (like asthma for example) how much would be enough to get you over a serious illness? Six months of take home pay might do it.

So, short hand, what is the worst (likely) thing you can think of that might happen to you? (Short of an earthquake, which wouldn’t just be happening to you.) What is a reasonable amount of money that you would need in that case? Your cushion will soften the blow.

The good thing about thinking this way is that it also shows you how much insurance you need. Serious illness is the worst thing? How’s your health insurance? House burning down is the worst thing? How’s your homeowner’s/renter’s insurance? Being fired is the worst thing? No insurance there. How’s your skill level? Your resume? Your side hustle?

Just trying to think about this makes you sleepless and depressed? How many past traumas have you had? Maybe some treatment for PTSD or some counseling or Cognitive Behavioral Therapy would be your best investment.

OK, sorry. I know that was too long. But the “emergency fund” is a big deal and deserves some attention.

Haha – agreed :) I actually like the idea of calling it a “cushion” more too – it really is what it is since how often do *real* emergencies really occur? From the way people pull from it so often you’d think it was a lot ;) (and I include myself in that group too!).

Great idea with the “worst case” scenario thinking, and about considering health stuff too… I know the younger we are it’s the last thing we ever think about – even though health bombs can go off at any time :(

BTW, I would really love to see you have a “like” button for this. Some of these comments were really on it and it would be great to just like them, rather than trying to reply to them about how I like them, which always sounds a little dorky to me. (Maybe that’s just my lack of social skills. LOL!)

Ha I love internet high fives :p That’s so true about free money when the company matches. My company doesn’t match until I work at least one year with them but that’s fine. After one year, that’s an extra 2k that goes towards my 401k so will not be complaining about that at all!

I think investing, you need practice. Can’t invest without experiencing some ups and downs. I remember the first day of investing, I couldn’t sleep at night because I was so afraid but now I can weather 5% movements without breaking a sweat!

I kept my savings liquid for a few years because I was worried about needing cash and not having access to it. Two years ago, I decided to open a business and used a significant portion of that money to invest in that. It was not until last fall that I finally opened an IRA. All of these were the right choices for me at the time. Keep reading and learning; you’ll make good choices.

The nice thing about businesses is it can be just as – if not better! – than IRAs and the like, so I give you mad respect for going down that path! Most millionaires/billionaires are businesses founders/owners :) Though of course the risks are much higher…

I’ve spent many years reconciling myself to my husband’s need for a wide cash cushion. How wide? $250,000 wide. He uses some kind of complicated “% of overall assets” calculation to arrive at this hilariously ginormous number. Granted this number is around 15% of overall assets with the rest in equities and rental real estate but still… His point, which I grudgingly accept, is that disasters are correlated so if there is a stock market disruption a la 2008, there is likely to be decreases in our other risky assets. He wants enough fire power to jump on something BIG (significant equity position or distressed property) using just cash. In the meantime, I have made my peace with this and just make sure the rest of our money is deployed more efficiently!

Oh wow!! Hard to really disagree with that too, if the $$ is being set aside for “future business opportunities.” At some point it WILL be spent, and only help increase y’alls massive wealth too! So that should help you sleep better? :)

I love cash baby cash! I can’t get enough of it and am taking profits to pay for life. I can see the hesitation with investing now, so I would go a more conservative asset allocation e.g. 60/40, 50/50 stocks bonds.

Great article, it’s scary to invest at first. The trick is to start slowly and build your way up. In my experience, anxiety around investing comes from not knowing WHY I was investing in what I was investing in. I used to let other people make my money decisions before me, and I used to get worried when the economy would go on a downturn.

Now I know exactly what I’m doing, so I don’t get anxious when the markets dip. My advice to people who get anxious when thinking about investing is to do more study!

For most people, investing in a couple of cheap index funds is a GREAT option. This is an inexpensive way to get great diversification. And you don’t have to spend 100s of hours tracking different stocks and you don’t need a huge amount of money to get started!

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I, J. Money, only claim the thoughts from my head. I am not a banker, CPA, money manager or anything else of that sort. Please seek a professional for any "real" advice. More info: privacy & disclosure page